The essence of strategic change is not a new direction, but a series of directives. What to start, what to stop, and what to continue comes from the strategic plan. That plan really acts as a road map or charter for change. A plan not carried out is a project failure for the business.
The difficulty of strategy implementation is a recognized challenge and a Booz Allen* study concluded that 73% of managers believe that the difficulty of implementing strategy far surpasses that of formulating it.
Plan, Do, Check, Fact
Business strategies that fail are really project management failures and the essence to manage a successful project is as much about managing behavioral change as operational change. Planned change refers to a premeditated, agent-facilitated intervention intended to modify organizational functioning for a more favorable outcome (Lippit, Watson, and Westley 1958).
While an executive view of strategy may distill itself through changes to the operating model and cost structure only lasting change is achieved with a cultural, change initiative. Research suggests that between 66% and 75% of organizational culture change efforts fail**.
One of the most challenging and unresolved problems in this area is the ‘apparently high’ percentage of organisational strategies that fail, with some authors estimating a rate of failure between 50 and 90 percent (e.g. Kiechel, 1982, 1984; Gray, 1986; Nutt, 1999; Kaplan and Norton, 2001; Sirkin et al., 2005). By failure we mean either a new strategy was formulated but not implemented, or it was implemented but with poor results.
I began the look at project management in a prior post on mergers and acquisition failures are project management failures. I don’t think I need to lay a scientific study for business strategy failure as I this blog would devolve. Your organization experience in business strategy failure provides the most sound case for concern.
For executive strategy adoption to gain organization hold, a series of directives, directly rely on people starting new behaviors, stopping old habits, and continuing the best of what they have done. An organization can succeed with strategic change only with success at cultural change.
Business strategy needs so much more understanding than the unfreezing-movement-refreezing framework that is conceptually sound, but empirically challenging. An organization will not succeed implementing a new strategy without success implementing culture change and a culture change relies on understanding the scope, constraints, and risk with organization culture before launching the effort.
Three features of implementation success, as defined by Miller (1997) include:
- completion of everything intended to be implemented within the expected time period;
- achievement of the performance intended; and
- acceptability of the method of implementation and outcomes within the organization
Like any human undertaking, projects are performed and delivered under certain constraints. Consistent with project management’s project constraints for success implementation success can overlay nicely:
- time (completion)
- budget (achievement)
- scope (acceptability)
The issue for business strategy failure may be less about strategy and more about the people who develop the strategy. Traditionally, only top executives make and develop strategy. However, only those most in touch with organization culture understand the endeavor ahead to take goals, objectives, and actions and change behaviors, minds, and motivations.
Increase the likelihood to successfully implement a business strategy when you:
- Identify and map your organization culture’s competing values;
- Identify what needs to be retained and what needs to change for strategy to succeed
- Crowdsource your strategy
- Use a strategic planning value chain to cascade executive, operational, and technical change
- Identify project scope and project risk
Strategy affects how things will get done. Culture, is quite simply, how things are done. After all, it’s not business it’s personnel.
No doubt I got some things wrong, or left out some important ideas. Please let me know what you think and suggestions you have for me to add value.
* referenced in: Excellence is Born out of Effective Strategic Deployment: The Impact of Hoshin Planning [.pdf]
**Alexander, 1985; Wernham, 1985; Ansoff and McDonnell, 1990